Tech in Asia noticed on Monday night that LivingSocial in Indonesia has recently rebranded to identify itself as “an Ensogo company.” Now, when visitors type in LivingSocial.co.id, they are redirected to the new domain id.ensogo.com.

In addition to the name change, the user interface on the site has morphed. Much like the previous site, Ensogo still sells a wide range of products and daily deals, but is now organized into eight different product sections: New, Outlets, Food, Things to Do, Beauty, Services, Products, and Travel.

Tech in Asia also observed that the LivingSocial Indonesia Twitter account now redirects to Ensogo_ID, but we have not yet been able to find a Facebook fanpage for Ensogo Indonesia. The LivingSocial Indonesia Android app now invites users to download Ensogo on Google Play.

According to Ensogo’s FAQ page, the company wants to strengthen its brand by using the same name for the company across all of its Southeast Asian markets. Apart from Indonesia, the same rebranding occurrence has happened in Thailand and the Philippines, and the same switch is planned for Hong Kong, Singapore, and Malaysia.

LivingSocial acquired Ensogo back in 2011, then posted a net loss of US$183 million in 2013. Last April, LivingSocial sold its Southeast Asian business to Malaysia-based iBuy Group, a company that is currently facing very low share prices. In Indonesia, Ensogo competes with the daily deal website Groupon. Tech in Asia is reaching out to Ensogo for more information.

How do some startups go from zero to billions in just a few months? How did Alexander the Great, YouTube tycoon Michelle Phan, and Tonight Show host Jimmy Fallon climb to the top in less time than it takes most of us to get a promotion? Shane Snow’s Smartcuts: How Hackers, Innovators, and Icons Accelerate Success seeks to answer these questions.

Snow has built a name for himself as a journalist and tech entrepreneur. Having co-founded Contently, the New York-based startup that helps freelance journalists and story tellers connect with brands in need of content, Snow is also a regular contributor to global media outlets like Mashable, The New Yorker, Wired, and Fast Company.

The focal point of Smartcuts is centered around busting old myths and scrapping conventional wisdom that most of us follow in an effort to get ahead in life. Snow’s overall thesis is that progress can be faster today than ever before. He highlights furturist author (and a director of engineering at Google) Ray Kurzweil’s essay “The Law of Accelerating Returns”, in which Kurzweil argues that at the rate we’re going, we as a species are likely to see 20,000 years of progress within the 21st century alone.

Failure is overvalued

Traditional mentors tell us that failure (even multiple failures) is necessary on the road to success. Snow argues that we place too much emphasis on failure as a good thing, as most people don’t always absorb the value of their mistakes, but instead shift blame onto others. Snow believes that entrepreneurs should try to engage in “lateral thinking,” or the act of reframing problems to challenge their basic assumptions.

His main assertions in the book are that paying one’s dues is an outdated idea that’s no longer applicable in today’s fast-moving society. Snow says the two main things that slow modern entrepreneurs down is thinking too small and thinking too conventionally. He argues there is a key differentiator between shortcuts and smartcuts: Shortcuts in business often lead to rapid growth, but are typically unsustainable in the long run, whereas smartcuts are sustainable and ethical ways of getting ahead by challenging preconceived notions.

Snow cites a plethora of success stories inside and outside the tech sector. He highlights the fact that while it took oil tycoon John D. Rockefeller nearly 50 years to generate US$1 billion, it took Andrew Mason, CEO of Groupon, only two years to do so (never mind that Mason was fired).

What do the US president and electronic musicians have in common?

Snow aggregates and ties together case studies on Elon Musk, Barack Obama, electronic music artist Skrillex, and Yahoo CEO Marissa Mayer to show that lateral thinking can be applied across any medium. In an interview with Forbes, Snow says:

Skrillex and Musk have track records of huge successes, multiple times, across multiple industries/genres. Their repeat wins defy conventional theories about luck’s role in success, and should give us hope that we have more control over our destinies than culture tells us we do. Both of these guys owe their successes to pattern recognition and moving themselves to the right place at the right time. In the book I talk about exactly how that happens, and what specific processes they go through to ‘hack’ serendipity. Musk has a few other habits that I’ve found transformative for my own business, as well.

No need to crawl before flying

In the book, Snow cooks up nine patterns for lateral thinking, and organizes them into three categories: shortening, leveraging, and soaring. According to Snow, “shortening” doesn’t allow innovators to replace hard work, but instead is something they use to eliminate cycles that were previously thought necessary to their success.

“Leveraging” means getting the biggest bang for your buck with regard to time, effort, and money spent. “Soaring” is a term Snow uses to describe the use of upward momentum, not experience, to dictate one’s own personal success.

The book is refreshing as a modern how-to guide for getting ahead of the entrepreneur pack. But perhaps its only drawback is that Snow moves quite fast through his examples and case studies, often leaving readers wondering if he’s in fact gone as deep as necessary to get to the heart of each individual success story.

One could also probe Snow by asking how entrepreneurs can maintain the art of lateral thinking, even after they’ve reached the top. But perhaps that can be the premise of his next work. Considering the fact that Smartcuts is Snow’s first full-length book and has received praise from critics like The Financial Times, calling him the next Malcolm Gladwell, it’s likely that we’ll see more books on innovation by Snow in the coming years.

500 Startups announced today it elected two new managing partners, Bedy Yang from its operation in Brazil and Latin America, and Khailee Ng, the firm’s venture partner in Malaysia, who oversees the Southeast Asian fund (500 Durians).

CB Insights, an intelligence resource for investors, calls 500 Startups the world’s most active venture capital firm. It has invested in more than 850 companies in 40 countries since its inception in 2010.

Ng founded 500 Durians and has a prolific record of starting ventures and investing. He is the founder of GroupsMore (acquired by Groupon) and Says.com (merged with REV Asia). In the past seven months, Ng has made more than 30 investments in Indonesia, Singapore, Thailand, the Philippines, and Malaysia.

500 Startups says Ng will continue to build the company’s presence in Southeast Asia by investing in the region’s most promising founders. He will also assist with replicating lessons learned from Southeast Asian startups, and applying them to other emerging markets.

However, Ng says not much will really change when it comes to his job description or responsibilities, and that he will still run the show for 500 Durians. No new venture partner will occupy his former role. Ng says:

My primary duty is to the limited partners who invested in the Southeast Asian fund, 500 Durians, and the startups I invested in. It is because of the speed and success of 500 Durians and its team that I am able to spend some extra time coaching other new venture partners, help new regional funds get set up, and contribute to the thinking behind 500’s next phase of scale.

500 Startups, was founded by Paypal and Google alumni, and is headquartered in Silicon Valley. The company claims to see the election of non-Silicon Valley leadership as part of its global strategy. More than 25 percent of its companies now come from outside of the US.

Founding managing partner of 500 Startups Dave McClure says, “the best entrepreneurs can come from any country. And they may serve customers from all around the world. You’re going to need a combination of local experts and a global platform to support them. And Khailee possesses all of those global-local qualities to help grow 500’s presence in Southeast Asia and beyond.”

Jan Oudeman doesn’t want Indonesians to confuse his deal site Grivy with LivingSocial or Groupon. While all three companies offer a similar user experience and value proposition in Indonesia, Grivy utilizes an auction model. Oudeman, the company’s 27-year-old founder, claims there’s nothing dull about the other sites, but his is just more entertaining.

“Yes, it’s nice to get 50 percent off on deals,” he says. “But in the end […] it’s like getting a present packed in transparent wrapping paper. Nothing wrong with it, of course, but there are more exciting things on Earth.”

Oudeman claims Grivy is unique because of its competitive nature. He refers to the site as Indonesia’s “eBay for leisure services” and highlights the site’s auction block as the key ingredient that gives his company the edge in a market that loves discounts.

Grivy auctions off deals related to goods and services like holiday getaways, spa packages, kids items, and restaurant reservations. All of Grivy’s auctions start at Rp 10,000 (US$1), and bidders determine their own price thresholds. Becoming a winner on Grivy depends on your own price preference, but also largely on those of users competing against you. Oudeman claims that the thrill of winning an auction is almost as fun as the leisure prize itself.

Grivy’s homepage is clean and simple. It has language options for English and Bahasa Indonesia, and lets visitors browse live deals in various categories based on city, number of people in a party, desired date, and time.

So I can finally afford to go on dates?

Oudeman says, “Our mission is to provide consumers with a never ending supply of amazing leisure activities on which the very same people decide on the final price themselves.” Oudeman believes Southeast Asia’s biggest market is interesting because Indonesians embrace technology fast.

Grivy has been around for a year in private beta mode. Last week the company had its first anniversary in Indonesia. Oudeman says, “Our system architecture was reviewed by Amazon Venture Capital which resulted in a grant of US$8,000. […] We are currently raising funds to speed things up.”

While Oudeman didn’t comment on Grivy’s exact number of site visitors per month, he claims Grivy has achieved 130,000 email subscribers in Indonesia. The site monetizes by charging its merchants a commission for using Grivy as a sales channel. It also charges an administration fee on top of each successful auction. If a user does not win the auction, they are not changed anything for participation (Oudeman claims other sites may charge US$0.01). Oudeman says Grivy is targeting US$10 million in revenue in Indonesia by its third year, and Grivy is ramping up efforts to sign up more merchants.

At the moment, the platform lets users reserve at restaurants and get discounts based on when they want to dine, but it also lets them discover credit card deals – something Indonesians are familiar with and fond of. Oudeman claims Grivy has also recently entered Bali as its second city in Indonesia, and this month he will launch native mobile apps for users and merchants on BlackBerry, Android and iOS. He says, “We are going after a solution that lets middle class affluent customers experience new services.”

Are you a karaoke aficionado? More importantly, are you a member of karaoke entertainment operator K Box Singapore? If so, you might be one of the 317,000 members’ whose private information got leaked out publicly earlier today.

According to a report by Channel NewsAsia, a group calling itself The Knowns had emailed links to a list of members’ personal information to several media outlets this morning. The list apparently contained data such as contact numbers, email addresses, NRIC numbers, dates of birth, and marital status.

The leak was reportedly done in response to the recent increase in tolls at Woodlands Checkpoint, which serves as the gateway between Singapore and Malaysia. The group described it as “an unnecessary financial burden on working Malaysians”, and adds that they have “done it [hacking] before and will do it again”.

If this situation sounds familiar, you might have read about the very recent security breach at M1, where a Computer Science masters student had managed to access forms showing data from customers while trying to pre-order the new iPhone 6.

The quick succession of security incidents makes it seem like it is rather easy to get access to sensitive customer information – and that likely wouldn’t be too far from the truth. In the M1 case, the student claimed that any sophisticated hacker would be able to download the whole database with just a few hours. Not too long ago, Tech in Asia also wrote about a ‘data broker’ who allegedly collected sensitive information from the customer databases of Deal.com.sg, Groupon, Zalora, Reebonz, CloutShoppe, and Lazada, and sold them at a rate of around S$1,000 (about US$800) for 300,000 names.

Most hackers tend to get away with it, too. Privacy laws are notoriously hard to enforce, as Singapore’s Personal Data Protection Commission does not police the collection, use, and disclosure of personal data by organizations – they would usually only act on complaints or tip-offs.

All this makes it very worrying for us living in an increasingly digital world, where almost our entire lives are up on the internet, and both corporations and governmental organizations aren’t giving us reassurances of their ability to guard them. I don’t know about you, but knowing that my life is literally in the hands of other parties makes me feel quite helpless. As Tech in Asia’s editor Terence Lee puts it:

As consumers, we simply have no clue how our data is being used and by whom, and that perhaps is the scary part.

Snaptee, the Hong Kong startup that sells t-shirts sporting DIY graphics from amateur designers, has secured US$750,000 in funding from local incubator Nest, the newly launched SXE Ventures, and Groupon Asia alumni Danny Yeung and Joel Neoh. The company will use the funding to add more social network-esque features to its app.

If you’ve never heard of Snaptee, that’s okay – but slacker sartorialists might want to spend thirty seconds on the free download. The app lets artists upload graphics specifically for T-shirts, which other users can then purchase directly from Snaptee. While Snaptee’s premise resembles that of Threadless, the apparel vendor that that brought nerdy designs to thousands of pseudo-Marxist high schoolers, the company distinguishes itself from its competition by selling exclusively on its smartphone app. Snaptee’s designers also tend to favor a 10’s post-irony hip-hop aesthetic, rather than Threadless’ hipster-gone-geekster – but we at Tech in Asia are far from couture snobs, even when it comes to T-shirts.

When we last checked in with Snaptee in February 2014, the company claimed to feature over 700,000 unique T-shirt designs. Cofounder Wai Lun told Tech in Asia that the figure is now fast approaching 2 million. The company hasn’t yet revealed its total shipments or sales revenues, however.

Lun says that Snaptee will use the funding to ramp up its social features. At present, users can follow designers, “like” certain graphics, and post short bios, but there’s little else when it comes to community building and interaction.

“We’ve been highly focused on content creation, meaning we help users create designs. Now we think it’s a good time to create a design network, where people can appreciate each other’s work and collaborate together. We want to create a highly creative design community for apparel,” says Lun. “For example, if you want to look at cat designs, you might be able to search for “cats” and see a lot of cat-related T-shirts from people around the world,” he adds.

]]>https://www.techinasia.com/hong-kongs-snaptee-secures-750k-in-funding-to-build-a-social-network-for-t-shirt-lovers/feed/0Forget Manila – CEO says startups should head to the Philippine provinceshttps://www.techinasia.com/philippines-startups-in-provinces/
https://www.techinasia.com/philippines-startups-in-provinces/#commentsThu, 14 Aug 2014 09:20:16 +0000https://www.techinasia.com/?p=188482Most entrepreneurs in the Philippines are scattered across Manila. Some are gravitating towards the specialist Area 55, a growing cluster of startups located in Metro Manila. Bryce Maddock, the CEO of TaskUs, argues for the completely opposite approach: you should set up your office in the provinces.

Maddock did so himself way back in 2009, creating the first TaskUs office in Imus, Cavite, a province on the outskirts of Metro Manila. His reasoning at the time was industry specific. TaskUs provides customer care and back-office support to tech companies in the United States, thus making it a part of the booming business outsourcing (BPO) industry, for things like phone banking or tech support, in the country.

The perks of the provinces

According to Maddock, the BPO boom is as much a curse as it is a gift – at least if you’re headquartered in Metro Manila. Companies in the capital have staff turnover rates of 80 percent to 90 percent. “BPO employees can often walk across the street and start working somewhere else,” Maddock explains.

The TaskUs location in Cavite, was designed to prevent high attrition, Maddock says, and in turn provide stable teams for their tech clients, which now include Tinder and Groupon. The turnover at TaskUs is at 30 percent, which he claims is among the lowest in the entire BPO industry.

Bryce Maddock (top right) with a TaskUs employee and his family.

The provincial location also reduces the working hours lost to traffic, which a recent New York Times article named as one of the biggest impediments to the nation’s economic growth.

“For people working at Manila-based BPOs, commute times can be as long as two hours each way,” Maddock says. “We asked ourselves, ‘what if we brought this work to the people?’”

The ensuing experiment to have TaskUs based in the countryside has resulted in an average commute time of twenty minutes, Maddock claims. To him, the difference in commute times is important not just for its economic impact, but for the value it provides his employees.

“We are saving our employees thousands of hours every day – hours that they get to spend with their families, instead of in the back of a jeepney,” Maddock says.

Reducing the brain drain, one Filipino at a time

Of course, the provincial location is not without its trade-offs. People who believe that outsourcing takes economic advantage of Filipinos could argue that the TaskUs presence in Cavite allows them to do so with a much more captive demographic – Filipinos in the provinces have even fewer work alternatives than their compatriots in the capital.

Maddock disagrees with this idea on two accounts. For one, he cites the fact that historically most well-educated Filipinos had to go abroad to earn a good wage. The BPO industry allows Filipinos to earn a similar salary while remaining in the country, thereby reducing the brain drain of Filipino professionals to other nations. “Filipinos can now work for a successful American corporation during the day, and be home to tuck their daughter in to bed at night,” Maddock points out.

Additionally, Maddock feels that the BPO industry has brought world-class training and business practices to the Philippines, resulting in a win-win for both American companies and Filipino workers. “Western businesses get to tap into amazing talent for a fraction of the cost of hiring the same roles in America, and Filipinos get to do meaningful work for interesting companies, acquire world-class skills, and earn a good wage,” Maddock suggests.

That part about Filipinos acquiring world-class skills may sound like lip service from the CEO and owner of an outsourcing company, until you look at what some of his employees have done. Many have risen from entry-level jobs at TaskUs into upper-management positions at the company. Several have even left TaskUs to create their own BPOs or open small businesses, and Maddock only wants more of his employes to do the same.

“Nothing makes me happier,” Maddock says. “The power of entrepreneurship is incredible. If we’ve inspired this in a few Filipinos, then we have done our jobs.”

Get away from the capital

Bryce Maddock is not the only one who is bullish on doing business outside Metro Manila. The Cities and Municipalities Competitiveness Index (CMCI) report for 2014 recently ranked the most economically competitive areas in the country out of 136 cities and 399 municipalities. This report was created by the National Competitiveness Council with assistance from the United States Agency for International Development.

While Makati City, which is home to startup cluster Area 55, was identified as the most economically competitive region in the Philippines, cities outside Metro Manila had a very good showing. The CMCI ranked their economic competitiveness according to three equally weighted pillars, including economic dynamism, government efficiency, and infrastructure.

By these measures, five of the cities in the top ten most economically competitive were located outside the National Capital Region. These were Cagayan de Oro City in Northern Mindanao, Naga City in Bicol, Davao City in Davao, Ilolio City in Western Visayas, and Cebu City in Central Visayas.

Though these places are more accurately described as small to mid-sized cities rather than true rural areas, they fall in line with Maddock’s thinking that it’s better to pursue business where there is less traffic, fewer people, and not as many competing tech companies.

These cities are sprouting up early signs of tech entrepreneurship. Cebu City, for example, now has its first coworking space in Location63. Coworking spaces are often home to early-stage tech startups and to freelancers looking to eventually found one.

Davao has recently gotten a hub of the Global Shapers Community, which is an initiative of the World Economic Forum. This organization is designed to unite people looking to make an impact on their local communities, and this is often accomplished through tech entrepreneurship.

So while the support network for entrepreneurs outside Metro Manila may not be very robust yet, that is exactly one of the implicit selling points: Rather than enter into an full-fledged ecosystem, you can play a key role in building a new one.

What’s a startup to do after failing to take over the world with an ultra-global social network? In the case of BuzzElement, the answer is – pivot 180 degrees and go ultra-local.

Back in February, the Kuala Lumpur-based company launched a Jelly-like app called Cream. The premise was simple: take a photo of an item you’re interested in buying, input the selling price, and wait for the crowd to tell you if it’s a good deal or not.

“We want to create something like Quora for mobile but make it a lot more simplified so we can utilize everyday people’s knowledge on a global scale,” CEO Hajime Hirose told Tech in Asia upon the app’s launch. “That’s why we focus on elements that makes sense to everybody; photo, price – with currency converter and location.”

Six months later, Cream is no more. Despite its intriguing premise, the startup simply didn’t have the time or means to cultivate its community.

“It was always my dream to make a C2C app that goes viral around the world, but Cream just didn’t take off.” Hirose tells Tech in Asia. “We had 10,000 users but there was no solid business model behind it. It was too slow to gain a user base and we just didn’t have enough capital to keep it going, so we decided to pivot into something different with a more focused business model.”

Thanks to some venture backing behind his team – an undisclosed sum courtesy of CyberAgent Ventures – Hirose has some wiggle room to move fast, break things, and pivot. Grabit, which beta launches on Android today (with an iOS launch planned for late August), embodies the startup’s move away from a take-over-the-world approach and towards a “start small and scale out” strategy. It’s not unlike your average daily deals app, but it aims to avoid the horror stories so frequently associated with Groupon and other like-minded companies.

The daily deals dilemma

Mobile coupon services like Groupon (NASDAQ:GRPN) have become the digital answer to print circulars and a pair of scissors. Unfortunately, some group buying companies have ended up hurting merchants more than helping them – deep discounts coupled with one-shot customers cost some companies thousands of dollars in losses. Groupon, which once carried the industry torch, was expected to exit to the tune of US$30 billion. Instead, it went public at US$20 a share at a US$13 billion valuation. Today, it’s trading at a mere US$6.25.

In Hirose’s eyes, hyperlocal means that Grabit’s mobile deal alerts, sent via push notification, must be within walking distance of the user. The new service won’t debut across Asia or even Malaysia as a whole, but through a partnership with one specific shopping center – Kuala Lumpur’s Publika.

Grabit also hopes to protect retail clients (dining establishments specifically) by allowing them to set up deals at very specific times. They can also turn a deal off if they start feeling overwhelmed.

Grabit tackles one of the most underserved needs for merchants – the ability to burn perishable inventory. The problem with Groupon is restaurants getting a huge amount of customers on a Friday night or the weekend. They don’t need visitors then, because they are already busy. Grabit lets them set up a deal when the shop is at a low capacity.

By partnering with Publika, Grabit has also secured direct access to a captive audience. In Kuala Lumpur, shopping malls are like a city within a city – combining a shopping area with residences, office spaces, and entertainment complexes. Hirose says these kinds of locations are especially popular with wealthy expats that have credit cards and purchasing power, and his strategy is to sign partnerships with other malls that target a similar demographic.

“The idea is that people will take a look at the app 30 minutes before going for lunch to see what the daily deals are,” Hirose says. “We don’t need to worry about bringing them from outside, but circulating people who are already inside.”

The app will face competition from city-wide services like LivingSocial and MyDeal, but Hirose says they cast too wide of a net to be considered true rivals:

In Southeast Asia, driving through heavy traffic and finding parking is a big hustle. Only bargain hunters will go thru the trouble to get the deals that are across the city, and they probably won’t become return customers.

Choosing diversity

Hirose (third from left) and the multinational BuzzElement team.

BuzzElement’s international team – with members hailing from Japan, Malaysia, Indonesia, and Nigeria – chose Kuala Lumpur over Silicon Valley and Singapore after a fateful day trip to the Malaysian capital.

“Frankly, we couldn’t afford the Valley, so we went to Singapore. We found housing and office space and were completely sold [on it],” Hirose explains. “But, on a whim, we came to Kuala Lumpur for one day and the chemistry was just perfect.”

Hirose, who went to university in the US, worked at Microsoft for 10 years before being poached by a Chinese IT consulting firm. He eventually rose to become vice president, managing 400 people, before breaking away to chase his entrepreneurial dreams. Setting up shop in Japan never crossed his mind – in part due to the populace’s comparatively low English ability and the high cost of international talent.

The startup also benefits from some attractive incentives from the Malaysian government, including a 10-year corporate tax waiver. In line with his push for diversity, Hirose was most drawn to Malaysia’s two-week turnaround time for foreign work permits.

“For sure, it’s easier to go global from Southeast Asia than Tokyo,” Hirose adds. “If we started in Japan, all my key people would be Japanese. To build a global company, you have to have people from different backgrounds from the beginning.”

]]>https://www.techinasia.com/buzzelement-malaysia-cream-fail-pivot-grabit-hyperlocal-mobile-coupon-daily-deals/feed/018 popular online shopping sites in Indonesia (2014 edition)https://www.techinasia.com/popular-online-shopping-platforms-in-indonesia/
https://www.techinasia.com/popular-online-shopping-platforms-in-indonesia/#commentsTue, 15 Apr 2014 06:45:16 +0000https://www.techinasia.com/?p=41197One of the sure things in Indonesia’s internet industry is the ample amount of ecommerce startups hanging around the corner. For 2014, we’ve updated our list of popular ecommerce sites in Indonesia. This time we’re going to categorize the following ecommerce sites according to their business models: online forums and classifieds, business to consumers (B2C) sites, consumer to consumer (C2C) marketplaces, and others.

Online forums and classifieds

Kaskus was built mainly as an online forum, but it grew to become one of Indonesia’s hottest ecommerce platforms. Users can post articles inside the platform as well as buy and sell items there.

In December, Kaskus had a change of leadership with new CEO Sukan Makmuri – who once held the position of VP for the internet banking technology division at Bank of America – overtaking the reigns from co-founders Ken Dean Lawadinata and Andrew Darwis. Then, the team reported that they recorded 40 million users and 600 million pageviews every month.

When it comes to websites that focus solely on classifieds, then TokoBagus would probably be the first in the minds of many Indonesians. Remco Lupker and Sebastian Arnold Egg co-founded the site back in 2003, in between they received hefty investment from MIH and went gung ho in advertising TokoBagus in many media outlets in Indonesia.

Last April, MIH disbanded one of its ecommerce portfolios – Multiply – to focus its funds on other more promising portfolios – including TokoBagus. In December, the team finally revealed its data for the first time and it was crazily huge: they passed one billion monthly pageviews in July 2013.

Looking to challenge TokoBagus’ dominance as classifieds leader in Indonesia is Berniaga. It is also very aggressive in marketing its site in the country thanks to the backing of its parent company 701Search.

B2C sites

Rocket Internet’s Lazada recently celebrated its second anniversary in Indonesia, and during its short two years, it has risen to be one of the biggest B2C ecommerce players in the country. Its endless pool of money helps of course.

During the country’s national online shopping day in December, Lazada Indonesia reported that they recorded thousands of orders per hour. It is now operating with 300 employees in Indonesia and is looking to dominate the next big trends: mobile commerce and third-party merchants.

Bhinneka is one of the first players to emerge in Indonesia’s ecommerce scene with gadgets as its main products. Its has been maintaining an online presence for over 14 years and is now expanding its product categories into other fields like musical instruments and toys.

In February it revealed that it reached an average of 21 million monthly pageviews in 2013 and earned IDR 600 billion ($52 million) that year. 70 percent of it, the company claims, came from its online store. Bhinneka now has over 500 employees with six physical stores in Jakarta.

The two-year-old fashion ecommerce site Zalora Indonesia is similar to Lazada Indonesia: it is backed by Rocket Internet and has an ample amount of money. And just like its sister company, Zalora is quite tight-lipped regarding its data.

Last September, DailySocial cited Hadi Wenas, then managing director of Zalora Indonesia, as saying that the Indonesian branch has become the biggest group out of Zalora’s ten branches in Asia in terms of revenue.

Tiket is one of the biggest travel ecommerce startups in Indonesia. It lets people buy various travel products like flights, hotels, train tickets, concert tickets, and even rent cars. According to the Jakarta Globe, Tiket now facilitates about 3,000 transactions every day with a total daily revenue of IDR 2 billion ($175,000).

Groupon entered Indonesia with the acquisition of daily deals site Disdus in 2011, and they are still the leader in Indonesia’s group buying business. In its third anniversary last September, Groupon Indonesia revealed that it had 500,000 daily visits with an average transaction per day of IDR 300 million.

Marketplace

Tokopedia and Bukalapak are local marketplace players who have been underdogs in their battle against giants like Telkom-eBay’s Plasa.com and MIH’s Multiply. But the two sites managed to come out on top and are now leading the local market. Headed by William Tanuwijaya and Leontinus Alpha Edison, the four-year-old Tokopedia now has over 770,000 active listings and sold 13.4 million items in the past year using its escrow service.

Bukalapak is a fierce rival of Tokopedia. It has also managed to overcome tough competition during its early years. Headed by Achmad Zaky, the site now facilitates transactions valued at about IDR 500 million every day. It now has about 400,000 live item listings and is looking to embrace the mobile industry with the launch of its Android app last month.

Qoo10 is a joint venture project between eBay and South Korea’s marketplace Gmarket, and it just celebrated its second anniversary in Indonesia. The team achieved over $2.5 million monthly revenue in 2013, which is a 500 percent growth compared to the year before.

Elevenia is one of the new players that emerged recently to shake things up in the marketplace space. It is a joint venture between telco XL Axiata and South Korea’s online and mobile service firm SK Planet. Both put in a total of $18.3 million as initial capital for this project and the two backers are optimistic it can win the market in the long run.

Armed with Rocket Internet’s expertise and funding, Lamido is another new player that wants to shake things up in Indonesia’s marketplace battlefield. The startup shares some infrastructure with Lazada Indonesia, such as logistics, operations, and technical know-how. Lazada Indonesia is doing very well, and we’ll see if the partnership works well for this site as well.

Rakuten Belanja Online saw some blood shed last year with the joint venture separation from former partner, media conglomerate MNC. Now a stand-alone subsidiary of the Japanese eshopping titan, Rakuten still believes that it can get something out of Indonesia’s market – but it will have to fight many new rivals to do so.

As a B2B marketplace, IndoTrading only allows businesses – not individuals – to post items on the site. The platform now has about 50,000 products and will launch an escrow payment system for its export page soon.

There are other players and trends to look out for other than the ones mentioned above. We are seeing a trend for vertical classifieds sites like PropertyGuru’s Rumah, iProperty’s Rumah123, and Rocket Internet’s Lamudi for real estate, and iCar Asia’s Mobil123, Rocket Internet’s Carmudi, and RajaMobil for cars.

We are also seeing good growth among price comparison engines in the country. In the last two years we saw new players emerge like Thailand’s Priceza, Kakaku’s PricePrice, and Pricebook to fight the local players PriceArea and Telunjuk.

Disclosure: East Ventures invests in Tokopedia, Berrybenka, Traveloka, PriceArea, as well as Tech in Asia. Read our ethics page for more information.↩

This is an updated post from Ratri Adityarani’s “8 popular online shopping sites in Indonesia”.

Groupon (NASDAQ:GRPN) recently announced the liquidation of all assets of Groupon Korea, and a plan to focus all its efforts to promote its recent acquisition Ticket Monster (a.k.a. TMON) in Asia’s third largest e-commerce market. Groupon now joins the long list of global companies that have failed to capture market share in South Korea. In December 2012, Yahoo (NASDAQ:YHOO) also shut down its Korean operations as profitability became an issue.

South Korea boasts some of the highest internet penetration and broadband speeds across the globe. But global companies have consistently failed to make significant inroads into these regional markets. Local old guards like Naver and Kakao have been able to keep outside competition at bay and maintain market leadership. Moreover, these Korean companies are expanding their own reach to other south Asian countries.

Why do these companies leave?

Groupon, at a global level, is trying to become a mobile ecommerce marketplace, and is trying to move away from its daily deals segment. With its previous expertise and relationships from the local deals segment, this is a reasonable path to choose. In South Korea, TMON is already the biggest ticketing service and ecommerce player. Groupon’s strategy is to use the strength of a local player to capture the ecommerce space and keep emerging rivals such as G-Market and Coupang at bay.

Groupon acquired TMON from LivingSocial in 2013. LivingSocial is another example of a global company that exited South Korea to concentrate on its US operations. This acquisition made South Korea the biggest market for Groupon outside of the US.

Yahoo had similar reasons to move out. In 2012, CEO Marissa Meyer started restructuring Yahoo’s operations and shut down all non-profitable activities. Yahoo entered South Korea in 1997 and has, for the last 15 years, been trying to capture market share. It has finally decided to focus only on profitable activities. But unlike Groupon, which is planning to keep operating in South Korea through TMON, Yahoo decided to completely pull out in the face of fierce domestic competition.

Companies like Facebook (NASDAQ:FB), LinkedIn (NYSE:LNKD), and Twitter (NYSE:TWTR) are finding it tough to crack the South Korean market as well. While they have seen some success, user acquisition has been much slower than in other regions around the globe, partly the result of other local players such as KakaoTalk, which have huge local presence and home field advantage.

What attracts these companies to South Korea?

Korea is a small country with a population of 50 million, so what makes it such an attractive market?

South Korea has been one of the fastest growing economies in the world with a GDP of US$1.13 trillion. It is ranked the 38th best country to do business in by Forbes. On the technology front, South Korea has 94 percent internet penetration and provides some of the fastest internet speeds in the world. It also leads in global smartphone penetration with over seven out of 10 people owning a smart phone. On top of this, Korea is likely to be the first country to roll out a 5G mobile broadband network, demonstrating the nation’s drive to maintain its position of as global leader in all things tech. Simply put, global companies cannot risk losing in this lucrative market.

Many have attributed their failure to a lack of understanding of cultural differences. Companies are trying to force fit a westernized model of business in Korea. Local companies understand the market and can cater to local needs and taste much better.

A few success stories

All is not gloomy for global companies in Korea. Google (NASDAQ:GOOG) has managed to gain some market share there. But unlike its global market leader position, it still ranks a distant third, behind local search companies Naver and Daum. Social networking sites like Facebook and Twitter have fared better in capturing the imagination of Koreans. Apple has also managed to compete with Samsung and gain 14 percent market share in the mobile handset segment; not great, but with the pride that Koreans hold their national corporations, this is not a bad showing.

According to the CEO of Hotdeal.vn, Nguyen Thanh Van An, Lazada and Zalora ship no more than 2,000 deliveries per day in Vietnam. He claims Vietnam’s top daily deals site trumps everyone else in the market with 10,000 deliveries per day. That’s 300,000 deliveries per month. He says his closest competitor, MuaChung, barely breaks 3,000 deliveries per day. And recently, NhomMua and CungMua, the number three and number four daily deals sites, merged to surpass MuaChung’s total. Nguyen is confident that he will maintain a strong lead over the market.

But the most telling thing I learned from Nguyen was not that he dominates the daily deals market (this is something quite well known in the industry) but that 70 percent of purchases on the site are actual products. Only 30 percent of Hotdeal.vn’s users are buying coupons. That’s right, it is only 30 percent a daily deals site. That means 7,000 of Hotdeal.vn’s daily deliveries are products.

If that wasn’t enough to blow you away, among the 7,000 products Hotdeal.vn ships per day, 3,000 of those are fashion items. Nguyen estimates that Vietnam’s leading fashion site is Sendo.vn, which is owned and managed by FPT, one of Vietnam’s largest and oldest tech companies. He thinks Sendo.vn ships up to 1,000 fashion items per day. Arguably, Hotdeal.vn is also one of Vietnam’s biggest fashion sites.

From 2010 to 2013

Back in 2010, Hotdeal.vn had just started. It was going up against NhomMua, the rising star with over $60 million in funding. Fast forward to 2012, NhomMua had a huge management scandal leading to its fall from the top. A year later, Hotdeal.vn slowly crept up into first place. According to Nguyen, the team was bootstrapped and played a strong, conservative game:

In 2012, we estimated that we had the equivalent of 90 percent of NhomMua’s marketshare. But our burn rate was much lower. In this market, if you go too fast, the cost will be way too high. Once we understand the market and customer, then you can hit the market harder.

Today, Hotdeal.vn is profitable. And looking into new verticals. Nguyen identified travel as one of the strongest verticals based on data from Hotdeal.vn, and opened up Yesgo.vn, a travel booking site that allows users to book hotels, plane flights, and tours to their favorite destinations. As Nguyen says, the site is aimed specifically at the Vietnamese market and has no lofty ambitions to expand like Agoda.com. He does want the site to be Vietnam’s top travel booking site in the next three years, though.

According to Nguyen, the customers are now educated and looking for other opportunities.

In the beginning, in 2010, it was all about going to the site because of the discount. Usually, a discount you couldn’t get anywhere else offline. But now, it’s just about price and price comparison. People just want to get the best price for a product, they’re not looking for discounts. They’ve expanded their view of online purchasing.

Before 2010, Nguyen started Vinabook.com, an online bookstore. The site still runs today in competition with Tiki.vn. He believes it’s he and his team’s experience at Vinabook.com that allowed him to execute so well with Hotdeal.vn. He thinks this is a key factor to successfully growing e-commerce in Vietnam.

In Vietnam, money is not enough. You have to have experience in your back pocket. The mathematics of going from one order per day to 10,000 orders per day is not easy. It involves pushing your marketing simultaneously with your servers, your operations, your customer service, and your overall understanding of the market. If we look at the recent failures in the e-commerce market, one of these key elements is lacking. Many of the failures this year pushed their market and spent too much on their staff before understanding their market or upgrading their operations.

Daily deals site LivingSocial announced today it will sell LivingSocial Korea, the company that owns group buying site Ticket Monster (a.k.a. TMON), to Groupon (NASDAQ:GRPN) for $260 million in cash and shares.

That essentially means LivingSocial is giving up South Korea for the time being, and Groupon is up to bat. Any remaining non-Korean assets owned by LivingSocial Korea will be divested.

Groupon says Ticket Monster makes $800 million in billings, from which it takes a 10 to 15 percent cut according to a source cited in AllThingsD. That puts the revenue figure around $100 million.

Online retail in India has experienced monumental growth in the past three years. According to a 2013 Comscore report, India has grown 31 percent year-on-year to become the world’s third largest internet population at 73.9 million.

With figures like this, it is understandable that the Indian online market has been identified as a massive opportunity for penetration and engagement. This situation has evidently caught the eyes of international online coupon companies, as a new wave of overseas entities have launched Indian counterparts in the past 18 months.

Newcomers to the Scene

Vouchercloud: The UK-based vouchercloud has experienced exceptional growth in the past 12 months, with over four million app downloads in the UK alone. In a recent release, Vouchercloud revealed that all 12 international territories are performing well and that they are looking forward to even further expansion. One of these recent expansions is Vouchercloud’s India site, which offers coupons in categories ranging from fashion to insurance, with prominent brands being represented.

CashKaro: Another UK-based company, Pouring Pounds has also arrived in India, under the moniker CashKaro. CashKaro has teamed up with over 350 brands to provide coupons and discounts, and differentiates itself by offering a cash back scheme. Simply put, this scheme involves CashKaro passing on to the customer a small percentage of the commission paid to them by listed merchants.

CupoNation: Backed by German internet juggernaut Rocket Internet, CupoNation launched in India recently. With over 500 Indian e-tailers on the payroll, CupoNation aims to encourage and foster the burgeoning Indian e-commerce sector with its coupon model.

Flipit: Dutch-based company Imbull has also recently launched in India as part of their ambitious international expansion strategy. Aiming to create a presence across 30 countries in the long run, Flipit claims to be the only coupon website aiming for such large figures, certainly making it one to watch.

What This Means for the Indian Online Coupon Industry

Innovation

Already a contested and increasingly crowded e-commerce sector, existing players will have to adapt to compete with the new wave of global arrivals or risk falling off the map. To claim and maintain their share of the market, coupon websites will have to think outside the box. This is the beauty of competition; it drives innovation. Comscore has revealed that mobile internet use has accelerated in 2013, growing to account for 14.2% of traffic. With this in mind, coupon sites in India will do well to think about how they can take advantage of mobile platforms.

Customer and Affiliate Benefits

Ultimately, the increase in competition will serve to deliver the customer greater savings, as sites strive to achieve the best value to entice shoppers.

An additional benefit unique to the coupon model is that the more competition that exists in the industry, the more merchants stand to benefit. As far as affiliates are concerned, more coupons on more coupon sites leads to increased traffic and conversions.

Considering the fact that many of the merchants listed on coupon sites are local Indian companies, it also ensures that despite the number of international coupon companies launching in India, the local economy still stands to benefit handsomely.

Many people are watching the rivalry between LivingSocial and Groupon in Indonesia. But let’s not forget there are plenty of local daily deals sites out there. One of these is EVoucher. How’s it doing in this tight market?

EVoucher was launched in 2010 by Danny Baskara. Since its launch, the company has partnered with more than 3,000 merchants in Indonesia, in categories like food and beverages, travel, and health. The site sees 25,000 daily visits, and has more than 800,000 active members who make 500 to 1,000 transactions per day. This number is increasing every year; in the first year, EVoucher saw just 20 to 30 transactions per day, rising to 200 to 300 daily in the second year.

Timed to coincide with its third anniversary a few days ago, EVoucher launched EVstore. Just like a regular e-commerce site, this new e-store delivers products to customers in a shorter time (one to two days after the transaction), compared to the daily deals system whereby customers wait till the deal period is over. This launch is the result of EVoucher’s careful observation of its customers, the startup says. The team noticed two things: customers want to receive their products faster and some of them want to buy the products again (in the daily deals system, they’d have to wait till the same promo is offered). Founder Danny Baskara tells us:

We focus on customer’s satisfaction and the promptness of products delivery. Therefore we launch EVstore, so that customers can get the products faster.

To attract more customers at this early stage, EVstore offers a free delivery service in Jakarta.

Standing up straight without any investors

At the moment, EVoucher does not have any investors. The company says that finding investors is not the main concern, but they’d seek out VCs experienced in B2C e-commerce and who have the same vision. So it’s not just about financial support. The startup claims that its monetization is going well so far. Danny explains:

The positive thing about having no investors is the team becomes more flexible and creative in terms of making revenue models.

The team says it has some new monetization strategies in mind, but declined to reveal them at this stage.

EVoucher will launch mobile apps and add some new features in the near future. Looking at its stats and progress, EVoucher could become a rival to the two biggest daily deals sites in Indonesia, LivingSocial and Groupon.

After launching its flight booking engine a while ago, daily deals site LivingSocial Indonesia is rolling out a new partnership with Indonesia’s national airline, Garuda Indonesia. It offers tour packages to three countries: Singapore, Thailand, and Malaysia. The company claims that those countries are the most popular destinations for Indonesian travelers.

Buyers will get the full tour package, covering flight tickets, accommodation, and also local transportation along with a tour guide. LivingSocial Indonesia has are five tour packages on offer right now: two packages to Bangkok (all-in or three-day tour) , one package to Kuala Lumpur, and two packages to Singapore (choose from a seven-stop or 15-stop tour).

Change of leadership

Along with its expansion into more travel deals, LivingSocial Indonesia has changed its CEO twice over the past three years. Nazar Musa is now acting as CEO of LivingSocial Indonesia, replacing Rolf Monteiro. When we asked why this took place, a representative explained that the online shopping industry is extremely fast moving; as a result, different skills are required to follow its rhythm. The company claims the changes will not destabilize the company as it struggles in the cutthroat daily deals sector. The site has more than 1.5 million members right now.

LivingSocial’s closest rival in Indonesia is Groupon. The latter company celebrated its third anniversary at the beginning of this month. Groupon Indonesia has now reached around 2.5 million members. It also has similar tour packages on offer.

]]>https://www.techinasia.com/livingsocial-indonesia-partners-indonesian-airline-offers-tour-package-singapore-thailand-malaysia/feed/0Spungry looks to disrupt the traditional group buying industry in Singapore with just $1https://www.techinasia.com/spungry-disrupt-traditional-group-buying-industry-singapore-1/
https://www.techinasia.com/spungry-disrupt-traditional-group-buying-industry-singapore-1/#commentsFri, 20 Sep 2013 12:30:03 +0000https://www.techinasia.com/?p=144053

While Singapore has seen its share of group buying startups in the past few years, the country will be seeing another one popping up next month. Called Spungry, the startup focuses on only food and beverages deals. But besides that, is it any different than the other 12 notable group buying sites 1 still operating in Singapore today? Co-founder Hiroyuki Kiga says yes.

Merchants can post any food and drinks deals they want to offer on the site themselves. Spungry will only take S$1 out of each deal, and buyers can pay the rest of it directly when dining at the restaurants.

Each deal will only be shown for 10 minutes, with a 140-character limit explanation for each of them. And if the coupons aren’t sold out in that time frame, the deal will get recycled back until all coupons are sold out. So far there are about 800 merchants signed up. Spungry is set to be launched next month, and until then you can access its beta site here.

4 problems in group buying industry

Kiga says that they are looking to solve four problems in the group buying industry:

First is better deals for diners. At the moment, most group buying sites receive a lot of revenue from each deal, some of them even get up to 50 percent. Spungry’s taking a fixed amount of $1, which means that merchants now have more room to offer better deals to users.

Second is merchants get to earn money directly without hassles. Kiga argues that there’s an unnoticed deal in group buying contracts which says “payment upon redemption”. This means that if $100,000 worth of deals were sold, merchants don’t usually get the full amount of the share because not every buyer redeems the deal.

This happens because of various reasons like not having time or simply forgetting all about it. Kiga explains further:

Deal sites explain they need to reserve it for refunds. But, refunds are known to be hard to get and even if the refunds are never claimed, the unclaimed amount still isn’t split with merchants.

Spungry doesn’t have such a clause. It takes the aforementioned dollar and that’s it. The startup doesn’t work as an escrow service so users can pay the rest of the amount directly to the merchants. There’s no more waiting time for merchants either to get their share of the deal.

Third is less remorse for buyers. There’s an easy refund service on Spungry. Users have up to 100 days to get refunds, and to do that they need only click a button. The $1 refund will be wired back into their online account and it can be used for other deals instead. So this should be good news for diners who often forget about their online deal purchases.

Fourth is the aforementioned online marketplace platform. Merchants can start posting their deals immediately on Spungry’s self-service page. So Kiga says that merchants won’t need to “negotiate with salespeople, wait for approval, and then queue to be posted, and there’s also no limit to the number of deals they can create.”

Avenue for growth

Kiga argues that while Groupon needed a huge amount of money to grow, things should be more scalable for Spungry. Back in September 2011, Groupon had $244 million in cash, as well as a total debt of $506 million with $465 million of it being owed to merchants. Kiga explains that this “implied at the point they went public, they needed to use merchants’ money to fund and expand their expensive operations.”

Kiga argues that Spungry has no debt situation, and that its operations mainly require marketing funds.

The platform can also adhere to expansion plans as it can be used from outside Singapore. The team has designed the system to accept deals from other countries, and when the system detects 60 merchants creating deals from one territory, then Spungry will become available in that place and diners can start buying.

According to All Deals Leak, Singapore’s deal market generated almost S$130 million in 2012 alone. There’s definitely huge money to be found inside the Lion City.

Eating together with potential mates

Kiga himself is working at GREE Ventures and has made some investment analysis and decisions. He and five other partners are very enthusiastic to disrupt the traditional group buying industry.

Interestingly, Kiga mentions an upcoming plan which syncs nicely with the team’s tagline of “eat together”. It is a social networking feature whereby users can buy other users’ a deal while sending a short message. “If she accepts, it’s a great way to reconnect in real life. If she doesn’t, it’s just $1 spent.”

The business model looks solid so far, but execution will always be the key here.

Groupon Indonesia celebrates its third anniversary this September 1, and is holding its annual sales program called “99 Event.” In this event, the company offers deals from over 60 merchants priced at IDR 99,000 (US$8.70) throughout the month of September. While we’re happy to browse through the deals, we think the company’s newest data is also nice.

Touted as Indonesia’s number one daily deals site, this is what the company told us about its traffic:

The company has partnered with over 5,000 merchants in Indonesia so far.

The site receives 5,000 500,000 visits every day.

Average transaction on Disdus.com (or Groupon Indonesia) per day is IDR 300 million ($26,375).

The company has 2.5 million members in Indonesia.

Groupon’s closest rival in Indonesia is LivingSocial. The latter company recently launched its flight and train) booking engine by partnering with ticket booking platform Tiket. In May, LivingSocial told us that it garnered 3 million monthly pageviews. Since then, the company has also seen a change of management with Rolf Monteiro no longer acting as the CEO of its Indonesia branch.

Groupon’s China venture has had a rough ride, but it’s still alive. The site, called Gaopeng, has just secured a reported $30 million in funding to grow the business. While the investment is confirmed officially, the number is from a source informing the QQ Tech site. The funding is mainly from the joint-venture partners: Groupon (NASDAQ:GRPN) and Tencent (HKG:0700).

Actually, Gaopeng was merged last summer with one other daily deals site run by Tencent to form a new company called GroupNet. Gaopeng still operates under its original name, but Groupon now has only a minor stake in the firm, way down from the normal 49:51 split in a joint-venture business.

GroupNet CEO Lin Ning revealed today that Gaopeng has now exceeded RMB 200 million ($32.4 million) in monthly sales volume from its daily deals, and says the site is close to being profitable. In our most recent deals industry stats we saw that Gaopeng is growing slightly under its new parentage, but is still a minor player in the China market. Gaopeng got $40 million in funding last October.

Yesterday we reported that Gaopeng has lost nine vice-presidents in the past year. Or perhaps they’re just handing out VP titles like cookies. Groupon declined to comment on that story.

]]>https://www.techinasia.com/groupon-china-gaopeng-30-million-dollars-funding/feed/0Abandon Ship! Report Claims Groupon’s China Venture Has Lost 9 VPs in the Past Yearhttps://www.techinasia.com/abandon-ship-report-claims-groupons-china-venture-lost-9-vps-year/
https://www.techinasia.com/abandon-ship-report-claims-groupons-china-venture-lost-9-vps-year/#commentsTue, 23 Jul 2013 02:00:37 +0000https://www.techinasia.com/?p=133894It seems that Gaopeng, Groupon’s China joint-venture (of which it now owns only a minority share), may have something of a personnel issue on its hands. Sohu IT is reporting that the company has seen nine VPs leave over the past year alone. The reported list of the departed includes:

Marketing VP Wen Jingjun

Sales VP Xie Youlin

Technology VPs Wang Yongxiang and Yao Liqiang

Executive VP Zhao Yi

Financial administrative VP Shi Lei

Customer service VP Wu Chao

Regional sales VP Lin Zhongrun

Tencent QQtuan technology team leader Ivan

(We haven’t been able to independently confirm the names on this list; Sohu IT cites a variety of internal reports it has accessed but which are not available online. We have reached out to Gaopeng for comment on this story; Groupon declined our request for comment.)

Sohu IT also spoke to knowledgable but (as usual) anonymous sources who confirmed the list above and speculated as to the reason for the apparent VP exodus. Supposedly, the source of the trouble is CEO Lin Zhu, who Sohu’s sources say isn’t willing to listen to anyone else’s ideas and shuts out any subordinates to disagree with him.

That certainly seems like the sort of thing that could drive VPs away, but it’s best to keep in mind that these are still just rumors, and the explanation above just reflects the opinions of some anonymous Gaopeng employees, so it may or may not be accurate.

Groupon is currently embroiled in a legal wrangle with Villas International, a small Singapore-based company that brokered between tourist accommodations and group buying companies.

In a series of twists, what began as a SGD 2M (USD 1.6M) lawsuit has become a SGD 290K counterclaim by the merchant against the world’s largest daily deals site.

Founded by Mira Hamza and Feroz Ghulam, Villas earned a small fee from advertising vacation stays on various daily deals sites. While the business model is straightforward, trouble started a year into operations. In September 2011, they began running into cashflow problems and in subsequent months started defaulting in their payments to villas in Indonesia and Thailand.

Customers began pouring their grievances on at least twothreads in TripAdvisor about how they would book a flight to Bali after purchasing a deal, only to realize upon arrival at the hotel that there was no room because they didn’t receive any payments from Villas. Calls to the company were often left unanswered. A Facebook page was even created by troubled customers looking to compare notes.

‘Not our fault’

Mira and Feroz says it wasn’t their fault. In an interview with SGE, they blamed the daily deals sites, claiming they were unable to pay clients because the majority of the sites they dealt with had not paid them despite repeated reminders.

This, in addition to salaries for its nine employees, rental costs, and a contract clause with hotels stating that the company must pay them in the event of no-shows, drove the company into unsustainability in a short span of time.

According to Villas’ lawyers, Groupon was contractually obliged to pay the company within seven to ten days from the time of deal redemption.

The delayed payments signaled the beginning of the end for Villas, whose owners estimate that between SGD 500K and SGD 1M has been owed to them by various daily deals sites. The company had listed deals en masse in dozens of daily deals sites without knowing that most of their payments would be withheld.

“Groupon did eventually pay us for three redemptions eight months late, and that was only during the court proceedings. Only one deal went through,” said Mira.

The business was dealt a death blow in April 2012 when 13 Groupon companies filed a claim in the Singapore Supreme Court for USD 2M in damages due to losses arising from money paid to defendants, customer refunds, relocations of customers to new hotels, and damage to international reputation.

Part of that lawsuit was a Mareva Injunction on Villas. This meant that while the defendants could continue running the business, they could not withdraw cash from the bank account or liquidate their assets.

With the business essentially dead in the water, Mira and Feroz engaged law firm Colin Ng & Partners to appeal against the injunction. It took six months for the legal team to prepare their case. They had to sort out the financial accounts and dig up correspondences between Groupon and Villas to refute the plaintiff’s claims.

They successfully lifted the injunction on April 2013. The judge found no basis for the asset freeze as the evidence presented by Groupon was highly inconsistent. The court was then prepared to hear arguments for the damages.

An unexpected turn

According to Villas’ lawyers, since the plaintiffs were all foreign and Groupon Singapore was not a party in the case, the judge ordered th daily deals business to pay SGD 50k in security for costs to the defendants. This is a common practice since enforcement against foreign parties are difficult and expensive.

The orders were given on three occasions, once before the arguments to lift the injunction was heard, once when the court sided with the defendant in its ruling, and once more on 22 May this year when Groupon’s injunction claims were dismissed.

But the deadline on the 5th June passed by without a word from Groupon.

As a result, the court entered an interim judgment against the daily deals company, essentially ruling that Groupon would have to pay the company SGD 290K according to what was filed in the counterclaim, unless they succeed in appealing.

The sum covers the monies due and owing to them for the vouchers sold and redeemed to consumers.

Groupon has appealed the decision, but their application has been rejected. The NASDAQ-listed company has declined to comment on this story.

This may not the first time Groupon has delayed paying merchants or used legal threats to bring them in line with its policies.

VentureBeat writer Rakesh Agrawal claims to have receive many emails from small businesses alleging that Groupon had not paid them for weeks and that the sales rep had threatened to sue.

“But filing a lawsuit would be suicidal for Groupon,” he wrote, “merchants won’t want to take that risk, and it will only increase Groupon’s adverse selection problems.”

Rakesh notes that he has not heard of a single case where Groupon actually sued a merchant. If true, the case with Villas could very well be the first.

Since its initial public offering in 2011, Groupon’s stock price has tumbled from a high of USD 26.11 to less than ten times the value last year. In Q3 2012, it reported a revenue of USD 586.6M, barely missing estimates.

Following founder and CEO Andrew Mason’s ouster however, it beat expectations by posting a revenue of USD 601.4M, an 8 percent year-on-year increase. Share prices have climbed to a one-year high.

It’s time to check back in with China’s massive daily deals industry and see how all the Groupon-like sites are progressing in Q1 2013. One of the key findings is that the top 10 deals sites have nearly completed their consolidation of this previously very fragmented market. The top 10 now account for 94.7 percent of daily deals revenues in the country, up about 10 percent from the same stage last year.

The new statistics – once again from Dataotuan – also show that the total revenue in the industry in Q1 was RMB 10.3 billion, which is nearly $1.7 billion. The top seven sites remain the same from Q4 last year as the once volatile sector settles down.

The big winners in the new data include second-placed Meituan, going from 13.1 percent market share to 17.8 percent. It’s the largest indie/startup deals site in China, sitting in second place behind Alibaba’s Juhuasuan. But Alibaba’s site saw a big drop in market share, falling from 47.8 to 33.6 percent from Q4 2012 to Q1 2013.

Another climber is Gaopeng, which is Groupon’s (NASDAQ:GRPN) struggling China site. After years of decline, it’s finally gaining traction after being merged with FTuan last summer under the guiding hand of investor (and China’s biggest web company) Tencent. Gaopeng gained nearly a whole percent point in the last quarter to now stand at 2.7 percent. Here’s the full scene:

Here are the movers and shakers in the past year:

If you look only at local deals – for things like restaurants and entertainment – the market share pie looks very different. That’s because Alibaba’s Juhuasuan focuses largely on product deals. Here’s the scene for local deals:

See all the new figures in Dataotuan’s full presentation deck, embedded here:

E-commerce in Vietnam isn’t showing any signs of slowing down. With daily deals leading the trend in 2012, this year is set to be one where smartphones dominate. CityOffers fits right into this new market.

It’s a daily deals iPhone app, and it’s the only mobile-only deals app in Vietnam. CityOffers.vn was quietly launched in November last year, avoiding the usual clutter of Groupon-like sites.

The app displays deals in Hanoi and Ho Chi Minh based on your GPS location. When you click to receive the deal, your phone is asked to send a text message to the main service, which then sends you a voucher code. The app allows you to go into a map view to see the deals nearest to you. It also allows users to share offers on Facebook.

This application comes at what some in the technology community believe is the end of the daily deals trend. That’s because Groupon’s stock price is down to a bargain price, and due to the crash that leading daily deals site, Nhom Mua, experienced recently. Some people I’ve spoke with in recent weeks have even hinted that it is much easier to make money on mobile, mainly because of the charges that you could make via SMS and piggybacking on telco services. Charges that websites cannot take advantage of.

It has also gotten easier for Vietnamese mobile consumers to top up their phones. Not only are cigarette sellers on almost every corner of Vietnam selling top-up cards, but we are starting to see top-up kiosks where any consumer can add money to their phone, regardless of telco subscriber.

Although Nhom Mua, Vietnam’s leading group-buying site, is finally back online, the news of its investigation by authorities – and the website takedown – has sent shockwaves throughout the startup community and Nhom Mua’s many customers nationwide. With some customers are left stranded, unable to use their coupons nationwide, it harkens to larger Vietnamese economic controversies. Now, there seems to be two directions that the online group-buying market could go in Vietnam.

Will there be an increased skepticism of web companies, as evidenced by consistent low spending in online advertising, a market that group-buying sites are eager to penetrate? Or will Nhom Mua’s brief fall signal a chance for the mass of Groupon clones to jump in?

At last count, in November 2011, there were 97 Groupon clones in the market with 10 players at the head of the pack. Nhom Mua was at the front along with Muachung.vn. The success of Nhom Mua was not just paved by its relationship with Diadiem.com, the leading local location-based web service, but also because of its solution to a still-looming problem in Vietnam: e-payment systems. Nhom Mua adapted to a market that has still not implemented widespread credit card payments by instead using a cash-on-delivery (COD) system.

A recurring theme I’ve been seeing at conferences in Saigon is e-payment is one of Vietnam’s greatest obstacles to growth in the online space. Successful models thus far have ignored the problem by going straight to COD. With Nhom Mua’s recent fall from grace, and the baby Nhom Muas with a fresh market to jump into, it’s only a matter of time before new companies rise into prominence. An increased skepticism of the online space is low on the list of dangers though. With the internet penetration at 34 percent and an increasing portion of them moving into social media, the online market is getting bigger and bigger. Although companies and people may not be trusting of web content, they are learning more and more to be dependent on it.

The problem that these baby Vietnamese Groupons face is a surging interest in e-commerce and what some believe are key fallacies in the Groupon business model. E-commerce provides small and big businesses with access to the same customers, and also bring discounts to consumers. Businesses have also been learning the hard way that discounts on their products are negatively impacting public perception of their goods and services. Whether or not these new group buying players can come into the market, (or Nhom Mua will salvage its reputation) and deal with new business models that are more appealing to businesses, remains to be seen.

]]>https://www.techinasia.com/impact-vietnams-fallen-group-buying-star/feed/0After Acquisition by Groupon Australia, Crowdmass Co-founders Embark on New Venture, Venuemobhttps://www.techinasia.com/venuemob/
https://www.techinasia.com/venuemob/#commentsMon, 03 Dec 2012 04:42:01 +0000https://www.techinasia.com/?p=101039We’ve mentioned Venuemob a lot in our Australia startup news, but never got a chance to really delve in deeper. Venuemob is a Melbourne-based startup that provides a platform to search for a place to hold events. Here are three fast facts you need to know about this startup:

Two of the three founders of Crowdmass, a group-buying site in Australia later acquired by Groupon’s StarDeals in Australia in April 2011, are behind Venuemob.

The brains behind Venuemob have been blazing an entrepreneurial path since they were students, showing that it is possible to work on a startup while being in school.

Venuemob has a directory that lists venue information in Melbourne, allowing you to compare them and view booking availability. It aims to gradually add more features, enhancing the entire user experience for both venue owners and those searching for venues.

Events planners will appreciate that the entire venue search process is streamlined for your own convenience. It cuts down on the time spent gathering information about the venue, from the venue availability to the menu. There are also 360 degree tours on the website, which save you the hassle of scouting the site yourself.

Co-founder Ying Wang tells us more:

[T]he comparisons aspect is a pretty important part of what we do, and we are ultimately looking to make it as easy for people to find venues for functions. How we allow people to compare is to standardize the information for all the venues, including 360 interactive tours inside each of the venues. We provide these awesome tools to help users find relevant results.

With Venuemob, you would be able to explore venues you may not have considered. Venuemob also has a concierge service for busy bees who would prefer to have everything arranged.

So what inspired them to start Venuemob in the first place? Ying elaborates:

I think it was a combination of our previous local e-commerce and marketing experience while at Groupon, [along with] our personal [affinity] for exploring new exciting venues. Initially we actually worked with a lot of venue owners and we personally introduced a few functions to venue owners in Melbourne and Sydney.

The venues ended up loving it because it drove a lot of revenue to their business, and our friends were really well looked after because we knew these venue owners. [Conversely,] we were confident that they would be able to look after our friends.

The site currently boasts around 300 venue spaces in Melbourne, including bars, restaurants, hotels, and function spaces. And they are pretty selective in the venues they choose, says Ying, noting that this ensures that venues have a great reputation and are able to deliver quality service to its users.

This points back to the startup’s bottom line of ensuring top-notch customer service on its site, and that is why they have been getting frequent inquiries and more listings. In order to meet this demand, the startup has expanded from just a mere three-man team in July to 10 people at present.

The team is an impressive one in my opinion. First, they managed to pull off an exit while still in school. Second, they were able to obtain funding in a bleak investment scene like Australia.

If you happen to be in Melbourne and are looking for a venue to hold Christmas or year-end parties, you can check out Venuemob here.

The doyen of daily deals, Groupon (NASDAQ:GRPN), opened a new brick-and-mortar store in Hong Kong earlier today. It comes just over four months after Groupon opened its first-ever such “concept store” in Singapore.

The Hong Kong shop, at Soundwill Plaza in the Causeway Bay area, is the same kind of deal, allowing people to pick up pick up certain kinds of products, test out everything that’s on display, and get any kind of customer support. The CEO of Groupon HK, Danny Yeung (pictured right), explained in today’s announcement:

Groupon Hong Kong’s CEO, Danny Yeung. Click to enlarge.

We’ve found many customers prefer picking up their Groupon products as opposed to delivery in Hong Kong, and as a part of our commitment to our customers and the customer experience, the Groupon Concept Store is now launched.

The new Causeway Bay store, which fills out 4,000 square feet of floor space, is opposite Times Square and is open 10am to 9pm daily. It comes a full year after Groupon’s much-deflated IPO; after debuting over its $20-per-share expectation, it’s currently at a mere $2.97 in Friday morning trading.

The store’s opening was hailed with a green-sweatered flash mob dancing on the streets – today and throughout the week. I like to imagine an alcoholic walking past one of these and thinking, “It’s St Patrick’s Day already? Sweet!” Here’s the flash mob video:

Now that Groupon’s (NASDAQ:GRPN) official China site, Gaopeng, is effectively controlled by Tencent, the country’s biggest web company, it’s rumored to be entering into a very interesting and social partnership. According to sources cited by Techweb, Gaopeng will be tapped as the official daily deals provider for Tencent’s (HKG:0700) WeChat app in a future update that’ll see the messaging app introduce local deals.

With a great many of WeChat’s 200 million users being in China (where the app is known as “Weixin”), this Gaopeng integration would mark a major expansion of the Whatsapp-like service in an e-commerce direction. The new feature is rumored to be coming in late November or early December, and will be dubbed “micro group buy”.

Why is Tencent steering Groupon’s Gaopeng into this? That’s because Gaopeng was recently merged with FTuan under the guiding hand of Tencent, an investor in both those deals sites. Now Tencent has a major (but undisclosed) stake in the merged holding company, which is called GroupNet.

The payments infrastructure for WeChat’s rumored new direction is ready with Tencent’s Tenpay app recently updated to accept cash-less mobile payments. It’s not clear if that’ll be needed for WeChat users to purchase deals in the messaging app.

With other messaging apps like KakaoTalk and Line aiming for fun and entertainment, it’d be interesting if Tencent’s WeChat instead took aim at O2O and local deals.

You might recall that in June of this year, Groupon China was merged with larger daily deals rival FTuan into a company called GroupNet. And now GroupNet’s CEO, Lin Ning, has revealed that it has recently netted $40 million in funding. The investment is thought to have been led by Groupon (NASDAQ:GRPN) and Chinese web giant Tencent (HKG:0700), but that’s not confirmed by offiicial channels.

This year’s merger was masterminded by Tencent, which already had an undisclosed stake in Ftuan and was also the official local partner for Groupon in China. As a part of the merger deal, GroupNet also runs Tencent’s own QQ Tuan daily deals site. It’s believed that FTuan – which attracted three major funding rounds already before its amalgamation – still holds the majority of the stake in GroupNet.

The investment is interesting as Lin Ning said that it will be used to acquire some smaller deals sites – so we might finally be seeing some of the tens of thousands of group buy sites in China get a meaningful exit. As opposed to collapsing in financial ruin, which is the way that thousands of them are going each year.

Lin Ning also revealed that GroupNet gets many merger proposals each day, and that the troubled 24Quan – which recently suspended operations – is one target that it might actually go for. Any acquisitions will be a case of buying users, rather than talent, in this overcrowded market.

In figures for 2012 Q2, Taobao Juhuasuan (run by Alibaba, which is is Tencent’s e-commerce nemesis) is the top deals site in China with 21.5 percent market share, and Meituan is a steady second place.

In Asia, the daily deals industry is apparently in the doldrums. In an analysis done by Groupon Singapore, only 19 group buying companies now remain, down from a peak of 72 in 2010 and 39 in 2011. 84% of these companies lasted less than a year.

The downward spiral in Singapore dovetails with the predominant trend in Asia and the world: Group buying sites are shutting down en masse. In the second half of 2011 alone, Daily Deals Media reported that 1,348 such companies have gone under. While some group buying sites have been acquired, they are in the minority.

Groupon’s share price, meanwhile, has tumbled to USD 5.25 per share on 6 October from a high of USD 31, despite a profitable quarter. Another American daily deals company, JigoCity (acquired by the owner of porn magazine Penthouse), is also finding the waters choppy in Asia: It recently left Singapore, Hong Kong, Malaysia, and Australia.

But just like how the movie Rocky Balboa became a surprise hit in the face of doubts in 2006 — 16 years after the disappointing last film — Asia’s daily deals sites are reinventing themselves to stay in the fight.

Entrepreneurial spirit stays alive at Groupon

Leading the charge in Southeast Asia are Groupon’s young country CEOs, whose companies were acquired during the daily deals giant’s rapid expansion phase. Flush with funds and support from their parent company, these entrepreneurs have continued to stay nimble.

“It is imperative for companies in the group buying space to continuously rethink and relook their business models to address the changing needs of both merchants and consumers,” said Karl Chong, CEO of Groupon Singapore. Together with his brother Chris Chong, he sold Beeconomic to the daily deals giant for a reported USD 24M in 2010.

Besides creating a mobile app, Groupon Singapore has ventured into the retail space. They launched a store in Suntec City, a shopping mall in the heart of Singapore. That is a first for Groupon worldwide. Shoppers can purchase deals through one of the computer terminals at the store and then redeem their items on the spot.

In Indonesia, Ferry Tenka, CEO of Groupon Disdus, is diversifying his business. Instead of merely acting as a referrer for merchants, they now operate their own online retail store and hold their own inventory. While the business model is different, they are targeting the same consumers with all sorts of products at deeply discounted prices.

Now, half of the company’s revenue comes from selling products. It claims that out of its 1.2 million subscribers, 30% to 40% of them have purchased from its online store.

About 1,000 to 2,000 products are shipped throughout the country daily. “That’s what companies in Indonesia typically ship in a month,” he told SGE during an interview at the East Ventures office in Jakarta. East Ventures, an early stage VC firm, had invested seed funding in Disdus.

It clearly believes in the potential of the company and its leader.

Conceivably, daily deals could eventually become a small part of Disdus’ business model. With so much growth potential in Indonesia’s e-commerce market — a Veritrans and DailySocial report projects that it will swell ten-fold from USD0.9B to USD10B by 2015 — there’s plenty of room for Disdus to grow.

“E-commerce in Indonesia isn’t established yet. There’s no one dominant player that controls the market. Disdus has a plan to go there,” he says.

It ain’t just about group buying anymore

Back in Singapore, before the media hoopla about daily deal’s decline started, a group buying company quietly pivoted into something else. Now, Perx wants to help brands gain repeat customers through digital loyalty cards. The startup offers a possible path for businesses who want to stay relevant in the daily deals space: Get the hell out of it.

Despite the divorce, Perx has incorporated elements from group buying into a new concept, called ‘chopmobs’. It is essentially a special reward that can be unlocked when a certain number of Perx users ‘chop’ at a particular location. For example, Coffee Bean held a campaign where it offered free drinks to users once 1,000 chops were gathered.

There are other signs of life in Asia’s group buying industry. Deal.com.sg, one of Singapore’s market leaders, has diversified into the online food delivery business, launching DEALivery.sg in March 2012. Meanwhile, deal aggregation companies like Singapore-based All Deals Asia and Indonesia’s DealGoing are propping up smaller players by giving them more exposure and offering customers a more unified user experience.

In China, a wave of consolidations has produced some clear winners: The top 20 daily deals sites now account for 97.1% of the market, according to daily deals aggregator Daotaotuan. Notably, the market leader right now is Taobao Juhuasuan, which is run by Alibaba, China’s top dog in both B2B and B2C e-commerce.

While intense competition and blatant copying in the daily deals space resulted in some casualties and outright derision within the startup community, it is too early to count the industry out.

While the low barrier to entry and an excess of me-too startups has contributed to the industry’s decline, the leading players have the benefit of strong partner relationships and economies of scale.

Group buying companies can expect further growth from mobile commerce, especially in emerging economies like Indonesia and the Philippines where a strong take up of low-cost Android phones is expected.

An emerging middle class will also continue to clamor for better lifestyle options at a fraction of the cost. This ensures a healthy demand for good deals online.

Perhaps we might even see daily deals melt into the background: More group buying sites will eventually diversify into other e-commerce models in a bid to build a more sustainable, long-term business.

The term ‘daily deals’ may one day go out of fashion, but its legacy will live on.

Well this is awkward – Indonesia’s Groupon Twitter account just got hacked. Formerly at @disdus, the page has now been hijacked and had its name changed to @MusikLegal1 – stealing Groupon’s 19,000 followers in the country. It seems that the only quick solution for Groupon was to simply start an entirely new Twitter account, which is now @GrouponID. It’s not clear why they couldn’t reset the password and prevent the total hijacking.

The @MusikLegal1 tweets are now protected, so we can’t see its recent tweets unless we had followed @disdus before this incident. But a friend of mine took a snapshot of the newly hacked account:

Hi, @disdus has been hacked but we still could access it from other apps that we use before. So, Just follow our new account @grouponid

Groupon Indonesia has acknowledged the hack and is now asking everyone to unfollow the @MusikLegal1 account and to migrate to @GroupOnID. This is quite a big blow as Groupon Indonesia needs to reclaim its sizeable follower base – now it’s starting from zero and is currently at a mere 391 followers.

]]>https://www.techinasia.com/groupon-indonesia-twitter-hijacked/feed/2Daily Deals: Controversial, But Important to E-Commerce in Asiahttps://www.techinasia.com/daily-deals-e-commerce-asia/
https://www.techinasia.com/daily-deals-e-commerce-asia/#commentsTue, 25 Sep 2012 14:30:11 +0000https://www.techinasia.com/?p=93268Jay Ng was most recently the general manager for Dealised, a Singapore based e-commerce start-up funded by SingTel Innov8. Prior to Dealised, he was part of the product management team at Sprint Nextel and managed a $100 million+ mobile messaging and data services business. Jay holds an MBA from the Stephen M. Ross School of Business at the University of Michigan.

Daily Deals site Groupon, with a shop in Singapore

It’s funny the reactions I’ve gotten when I’ve told people in the tech community that I’m in the ‘daily deals’ (a.k.a. group buying) industry. Generally I get a disinterested reply of “oh, I see” or sometimes even a very blunt “why?” Sure, Groupon’s stock price is flailing at around US$5 and the tech press is now seemingly “over” daily deals since it has stopped publishing stories bashing it.

It’s true that daily deal sites are the epitome of the copy catting gone wild which has plagued the Asian start up scene, however I think the tech community will look back at 2012 as a watershed year for e-commerce in Asia. So where have global e-commerce stalwarts like Amazon, eBay and others fallen short in Asia and how has daily deals filled this void?

Many consumers in regions like Hong Kong, Singapore, and even Thailand look at brick and mortar shopping and mall walking as “shoppertainment.” Hong Kong has always been a head scratcher for e-commerce having a high smartphone penetration (third highest globally per capita), a large consumer segment with available spending income and a high broadband penetration. However it greatly lags China in e-commerce growth with a paltry projection of 7 percent annual growth rate [1].

Daily deals sites have brought Asian consumers online simply because of the great discounts. Consumers go through the “inconvenience” of going online and have gotten over their distrust of buying a virtual good in the form of a deals voucher. What’s more they’re taking the risk of pre-paying for a product or service from mostly unknown merchants without even seeing it! Daily deals is only two years old and already the Hong Kong and Singapore daily deals markets are estimated to be worth between $60 to $70 million annually while Thailand, Malaysia, and the Philippines are in the $25 to $40 million range [2].

One of the obvious challenges of curating deals from merchants and brands is quality control. It’s the hazard of acting as a channel for sometimes unknown merchants to peddle their wares to your customers. As painful as it sometimes was, deal sites provided refunds to customers who complained about anything from a restaurant running out of a lunch set deal the day they patronized the establishment to the merchant themselves going bankrupt and skipping town.

This was the case for Groupon Hong Kong and BeeCrazy who were left holding the bag when Macao Dragon Ferry went under (over 150,000 vouchers sold). Deal sites quickly recognized the power of word of mouth and the importance of preventing churn of a customer to a competitor with a seemingly identical smorgasbord of deals.

3. A pathway for e-commerce to reach the masses.

Daily deals democratized e-commerce by making a multitude of payment options available so that the non-credit card demographics could shop online. For example, in the Philippines there are only roughly seven million credit cards and three or so million credit card holders. The numbers are even less for Thailand and Indonesia. In fact only 5 percent of online Indonesians engaged in e-commerce or online banking, with credit cards being one of the main roadblocks [3]. Over-the-counter payment, ATMs, and online bank transfers are much more the norm for Southeast Asia. Deal sites also offer Cash on Delivery for the most cautious of consumers.

4. A new direct marketing channel for SMBs: the introduction of hyperlocal commerce.

So far I’ve focused on the consumer side of the equation. Daily deals has given local merchants a relatively risk free, pay for performance marketing channel. I say “relatively” because in the early days some merchants were not coached properly on how to manage capacity for deals and were swamped by a flood of redemptions for loss leader deals. Since then, they (and the deal sites) have become much more savvy at pricing and structuring deals so that there is an opportunity for up-selling for a profitable customer acquisition as well as converting a new customer to a returning one.

So where does the industry go next? Lack of congruent payment infrastructures and economical delivery and fulfillment solutions will continue to be a challenge for e-commerce in the near term. Mobile is the obvious next step but it’s one that requires getting a few very important things right.

Utilizing the context of mobile (location, phone type, time of day, etc.) to drive discovery of deals and effective re-marketing.

Utilizing the phone as the vehicle for payment. Much has been prophesized about this (think PayPal, Square, carrier billing, NFC, mobile wallets) but the key is to get the app and mobile site experiences right first. This means a super convenient and secure process involving single sign on, mobile optimized payment page flows that are UX tested and then re-tested. Shopping cart abandonment recognition and re-marketing tactics will be key because 3G is not yet reliable in SEA and consumers’ attention spans on mobile vary depending on where they are.

Utilizing the phone as the tool for redemption. The first step is getting consumers and merchants to adopt a simple system to scan and validate a voucher that’s brought into the store on a phone.

Yes, the press has prophesized about more and more consolidation to come for the daily deals biz. Ultimately daily deals will take a different form. Sites are already trying to morph into full-fledged e-commerce store fronts. The next inflection point will come as large entrants like credit cards as well as web Goliaths like Google and Facebook come to market with a deals/offers experiences integrated into their primary use cases.

In any case, daily deals is not a one trick pony. So look for even more to come!

This is according to China Daily, citing research from Boston Consulting Group. ↩

My estimates are based on several sources including All Deals Leaks, and press clippings ↩

Japanese online service provider Excite recently launched its advertising-based points program called Excite Points, claiming to be the first of its kind user reward system in Indonesia. We talked to Nobu Kiyohara, the manager of Excite business development group [1], about the company’s expansion plans in the country.

We understand that in the last year, Excite Japan has started to look to expansion into other Asian countries, notably Taiwan and Indonesia, with the Philippines next in sight. In Taiwan, Excite has invested in two companies: e-commerce platform PCHome, and women-oriented review site Fashion Guide. Nobu added that they also tried to expand to China, but it was hard for them to identify the right market there. Should its points system prove successful in Indonesia, Excite plans to bring it to the Philippines next.

So how do Excite Points work? As shown in the above graphic, users login to the website and earn points through online activities, such as clicking a banner, subscribing to Groupon, getting a quote from an insurance company, or making purchases. Basically, it’s gamification. The points can then be redeemed for prizes at the Excite Points website.

At the moment, the program is still in the testing phase, and so the redemption options are only in the form of SmartFren phone credit top-ups. To provide more redemption options, Excite is looking to partner with Indonesian telcos Telkomsel and Indosat in the next couple of months. Excite also plans to add other products such as gadgets and more merchant’s products in the future.

The points are funded by the advertisers, or whoever sets the online activity. The company will pay Excite based on CPA (Click per Acquisition) according to what the advertisers want, like sending a quote on new auto insurance, for example. Excite explains that the CPA method offered by the program makes more sense than the usual CPC (Cost per Click). This is because the latter doesn’t guarantee that users complete the advertiser’s target activity even when they have seen and clicked on the ads, as explained on the following slide:

Nobu claims that Excite Points advertisements are better than Google Adsense and Adwords in acquiring potential customers. Google can help you acquire customers, he says, who are already interested in the product, according to user search keywords and content. While Excite Points can help acquire potential customers who might not even know about the product. The points program can introduce products to new customers who are actively seeking to earn points on the website. Of course, I’d personally say that each method has its own strengths and weaknesses.

On the Indonesian Market and Foreseeable Problems

Right now, Excite is looking to expand aggressively into the Indonesian market with its points system in terms of users, but especially advertisers. Nobu added:

Honestly speaking, the advertisement market is still small in Indonesia. I believe it’s 6 billion ad dollars including TV, traditional media, and online media. Online media consists of about only one to two percent of the whole market, but it’s growing. We are anxious to go into this market and become a game changer.

Nobu revealed that in Japan the 15-year-old points-based business system has encountered problems with “point hunters.” These are certain users who only look to get points without giving any real tangible benefits to the advertisers. A lot of point hunters even go to the extent of making multiple accounts to get the points. Should that happen, Excite already has the technology to maximize the system’s effectiveness. One such example is that Excite can submit a weekly report regarding user CPA, and then the advertisers can approve or disapprove the users regarding the point rewards. This is already implemented right now.

Whereas many other Japanese companies tend to go by themselves into new markets, Excite sees partnerships with the local major conglomerate Sinar Mas Group as its strength and differentiator here in the country. Nobu believes that together with the partner’s local knowledge and Excite know-how, they can execute and deliver the products well.

Excite doesn’t have an entity yet in Indonesia, and the team consists of four to five people located in SmartFren’s office at the moment. Nobu explained that one of the reasons why Excite chose to partner up with the carrier is because the company has data and access on active PC internet users in the country. Excite has also partnered up with mobile CPA network giant Adways Indonesia, and that should help them in the market as well.

The article is updated on August 20. Earlier we said that Nobu’s job title is “business development group manager of Itochu Corporation.” The confusion came because Itochu Corporation as the biggest stakeholder of Excite, is working closely together with Excite for its business development in Indonesia. And as Nobu put it “we are one in a way.” ↩

As we reported two weeks back, Groupon Singapore officially opens its world’s first Groupon retail store in Singapore’s Suntec City Mall today. Groupon COO, Adrian Tan, explains that the first shop – dubbed a “concept store” – will actually serve a practical purpose, and hopes it’ll help to deliver better service and greater interaction with its shoppers.

In an official press statement, Groupon (NASDAQ:GRPN) makes clear this is also meant to be a test-bed. Should this idea be successful, it will be adopted in other markets that Groupon is currently in.

Apart from allowing customers to pick up the products they have purchased from the site, the shop aims to create a Groupon ecosystem within the store – where iPads are provided to allow shoppers to browse, purchase, print, and redeem their daily deal coupons instantly.

Groupon customers dressed in green to support launch of the first concept store

Adrian elaborates:

Although many Singaporeans like to go online to purchase deals, many still prefer the face-to-face interaction and the fact that an online shop like Groupon has a physical presence. We want to offer the best of both worlds – both through our website and mobile apps for those who demand online convenience; supported by the Shop where customers can go and see our Groupon goods as well as talk to a Groupon ambassador face-to-face.

Karl Chong, CEO of Groupon Singapore, adds:

Our customers are the heart of everything we do at Groupon, and we strive to deliver better service and an enjoyable environment for them. Whether it be collecting or purchasing items or even getting in touch with one of our Groupon Ambassadors to learn more about Groupon, the Groupon Shop will help make deals on Groupon Goods more accessible to everyone.

For interested folks out there, the Groupon Shop is open from 11:00 am to 8:00 pm daily, and is located at Suntec City Tower 3, #03-27 G-L (at Cinema Level).

]]>https://www.techinasia.com/groupon-singapore-shop-officially-launches/feed/0Let’s Not Get Excited About the Gaopeng-FTuan Merger, Guyshttps://www.techinasia.com/groupon-ftuan-negative/
https://www.techinasia.com/groupon-ftuan-negative/#commentsThu, 28 Jun 2012 13:00:41 +0000https://www.techinasia.com/?p=82240There’s been an awful lot of discussion recently about the Gaopeng (Groupon)-FTuan merger announced earlier this week. It’s big news! On some Chinese sites, I’ve even seen talk of overseas IPOs and other very rosy predictions. Humbug.

As this site’s resident group buy Grinch, I feel it’s my duty to come rain on this parade. Only I’m not going to use rain, I’m going to use something even more depressing: math. You see, if we look at the market share numbers in China’s group buy space for March (the most recent we’ve seen), we find an independent FTuan in eighth place with 6.3 percent of the market, and an independent Gaopeng in 13th place with 2.5 percent. Both companies had been seeing minor growth in the short term but were down over the long-term, with FTuan having shed three percent of its market share over the last six months, and Groupon losing 1 percent of its share.

So, let’s make a best case scenario and say that neither of them lose anything in the merger and the long term trend of market share loss has stopped. We’re left with a company that controls 8.8 percent of the group buy market. That puts it in fifth place, still behind Meituan, 55tuan, Dianping, and Lashou. Lashou would be in close reach, so if we even assume a little growth since March, maybe Gaopeng-FTuan is now in fourth place.

And it’s a distant fourth place, too. While Lashou has been slipping over the past half year, Meituan, 55tuan, and Dianping have all been growing, and all of them still have a significant lead in market share.

Now, sure, fourth place isn’t too bad. It’s a better position than either of the companies were in before the merger, certainly. But is an IPO really realistic? No. Lashou recently had to cancel its IPO plans for lack of investor interest, and I rather doubt those US investors are going to be any more excited about a company that’s in almost exactly the same place as Lashou is.

Does this mean it’s curtains for FTuan-Gaopeng? Certainly not. But it does mean it’s probably time to cancel those parades. And it’s especially time to stop talking about US IPO plans, because that is just not going to happen.

Exactly as we’d heard was about to happen in recent rumors, it has just been announced officially that Groupon’s (NASDAQ:GRPN) joint-venture in China with Tencent, called Gaopeng, will merge with its larger daily deals rival FTuan.

The whole deal was overseen by China’s web giant, Tencent (HKG:0700), which not only owns half of Gaopeng but also has an undisclosed stake in FTuan. The financial deals of the merger have not been revealed. Groupon will be a minority shareholder in the new company, as it was in Gaopeng – but we’re not sure how “minor” it now becomes.

The merger will create a new company that’ll be headed by FTuan’s CEO, Lin Ning, but means that the two Gaopeng and FTuan brands and websites will continue as they are.

In this evening’s announcement, the new entity’s CEO, Mr. Lin, said:

China’s daily deals market is moving from investment-driven to operation-focused, and I believe the merger will position us well to further scale our operations and deliver innovative products to our customers. The multi-brand strategy after the merger will enable the new company to serve the segment needs of merchants and consumers in lifestyle e-commerce and mobile internet.

The new joint entity will combine the strengths of FTuan and Gaopeng to better serve consumers in the daily deals market in China. We believe group-buying is a natural leverage off our large user base.

For Groupon, this transaction is the next logical step in our strategy to strengthen our investment in China. Tencent has been a great partner, and we are excited to continue our partnership with them. We are also looking forward to working with the FTuan team to provide Chinese consumers and merchants with more compelling offerings.

We have covered a lot of Groupon clones in Indonesia, and now one has come to rapid prominence in just seven months into its business. In November 2011, David Suwarto tried to introduce a new look to the Groupon business model, launching Uluyu.com. It gives out free vouchers everyday to its users both online and offline – and for once, users do not need to print anything anymore!

I talked to Dika of Uluyu earlier today and he told me that currently Uluyu has about 400,000 active users from a total of around 550,000 users. So far it has had a total of 200 merchants as its partners. And in the last three months, Uluyu says it had 2,300 vouchers redeemed by its merchants. When I looked up Uluyu on Alexa, the website now stands equal to one of its biggest competitors AdaDiskon. But what makes Uluyu different from competing services? From my observations, Uluyu has three main differences:

Uluyu’s Unique Approach

First, while their competitors normally sell vouchers, Uluyu offers free vouchers. After registering and logging in to the website, Uluyu users, called “ULUfrens” by the company, can grab any vouchers (called “ULUpon”) by either liking it through Facebook, tweeting about it, or simply just grabbing it. Then users will receive the voucher code to be used at the designated merchants. What happens when you grab vouchers and do not use them? Your user ID will be blocked for a few weeks, depending on the number of violations.

Second, Uluyu does not provide details of the merchants on their website. Users can only see the merchant brand and information about the voucher, but nothing about the merchant’s products. When I asked Uluyu about it, it turns out that they intentionally do so not only to keep their website simple, but also so that more users would access the merchant stores and websites out of curiosity about their products.

The second idea behind that is that it’s a good way to attract merchants as they would have more potential customers – or, at least, visitors – go see their store. This too, has its disadvantages: you’re asking users to explore the products for themselves, which could be tiresome. It’s debatable, but it’s definitely something different compared to the usual Groupon approach in my opinion.

Third, Uluyu also offers vouchers offline through physical machines in malls around the Jakarta area. Their first mall partner is the biggest mall in the Gading Serpong area called Summarecon Mall Serpong (SMS). There are voucher machines located at the lobby of SMS where passers-by can receive random Uluyu vouchers for free to be used immediately inside the mall. They are currently looking to tie five more mall partnership deals in the near future. David Suwarto, founder of Uluyu comments:

At the moment, Uluyu.com is focusing on giving away free vouchers in the Jakarta area, eventually we will expand (our focus) to the other big cities in Indonesia.

What’s more awesome is the fact that Uluyu has given away five free vouchers to purchase a Blackberry Bellagio for only Rp 100,000 ($10) and one free voucher to buy a Toyota Avanza for only Rp 50,000,000 ($5,000). David insists that the added value of Uluyu compared to its competitors is their unique voucher deals. Now, if you are wondering how Uluyu makes money out of their business, it turns out that merchants pay a sum of money for an ad space on Uluyu.

There are also some unique features in Uluyu like ULUbadges and ULU$. ULUbadges reward its users through completion of challenges given, much like Foursquare. ULU$ is quite interesting as ULUpon users will receive 10 percent cashback points from the total value of purchase, which then can be redeemed with promotional products from Uluyu such as gift vouchers and movie tickets. Sadly, the two features are not currently in effect as Uluyu is focusing its resources on other projects at the moment.

So is Uluyu another Groupon clone? I think not. I believe that they are part of the new generation that offers added value through innovation upon the Groupon business model. This trend is now on the rise in Asia including FreeCharge in India and Handsup in China. I believe that we will be seeing more and more innovations like this in near future.

[Hat tip to jagatreview.com [1] [2] (articles in Indonesian) for spotting this startup.]

As some had expected would happen, Groupon Singapore will be launching Groupon’s (NASDAQ:GRPN) first-ever retail store on July 4, according to an official announcement from the company (in the form of a media invite to the opening). It’ll be strategically located in the Suntec City Mall (pictured above).

Our blogger saw a man with this bag on the MRT this afternoon, proving that the Groupon Store in Singapore is already open after a soft-launch last month.

With the launch of the new Groupon Shore, it aims to connect better with Groupon fans by bringing the deals to the physical store itself. And having it located in Suntec, which is in the heart of Singapore, makes it even easier for Singaporeans to visit the store.

But, as our friend Jon Russell from TNW points out on Twitter, ZDNet noted the opening of a Groupon store in that mall a few weeks ago. In retrospect, that seems to have been a soft-launch, and this July 4th event will be the proper launch.

Aside from that confusion, what comes to mind, however, is why? Why is this a good move for an e-commerce company that generally has low overheads? No doubt having a physical store allows you to have the personal touch and puts a face to the Groupon name. But I wonder what more this first Groupon store entails. In fact, within the e-commerce space in Singapore, popular blogshops such as tracyeinny and MDS have also set up physical shops to perhaps connect better with their customers. But their prices are seemingly more expensive too.

I guess we’ll be able to find out more when we attend the launch this July, to speak with Karl Chong and Adrian Tan, CEO and COO of Groupon Singapore, who will be present to open the store.

[UPDATE on June 22nd] Groupon Singapore has asked us to point out the following: